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CFPB expands its powers

Effective immediately, the Consumer Financial Protection Bureau has announced plans to start regulating non-bank institutions regardless of sizes in certain markets, including mortgage companies, payday lenders and private education lenders.
 
The CFPB will require non-banks to file certain reports and will review their compliance procedures and systems. In the areas of debt collection and auto financing, the CFPB may supervise "larger participants" after it defines the term. The bureau is readying an initial "large participant" rule that will soon be open for comment.
 
"(A non-bank is) a company that offers or provides consumer financial products or services but does not have a bank, thrift, or credit union charter," the bureau said, according to the ABA.
 
The bureau has determined that it may also supervise any non-bank that it determines is engaging or has engaged in conduct that may pose risk with regard to financial services or products. The regulatory plans are a result of the Dodd-Frank Act, which was signed into law in 2011.
 
"The Dodd-Frank Act, signed into law last year, gives the CFPB the job of supervising large banks, as well as some other types of financial companies, for compliance with federal consumer financial protection laws," the bureau said in a press release. "While banks, thrifts, and credit unions have been subject to examinations by various federal regulators in the past, other types of companies providing consumer financial products and services have not. One of the goals of the new law is to better protect consumers by expanding this type of supervision to nonbank companies. The examination of nonbank companies will be a crucial piece of the CFPB’s work."

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